Creating Overlays

I am a first time video editor and first time Roxio user so my apologies if this seems fairly basic. I have been going over the forum and I can't seem to find a solution as to how to create an overlay. I can see how to add overlays using the pre-loaded options but how to I put an overlay in the "custom" area? Ultimately I want to split screen my video and have two videos playing side by side but to do that (as I have been reading in previous posts) I need to use one of the videos in the main area another in the overlay area. Problem is I don't know how to put a video as an overlay.

The advantage of that is that it is locked to that point in the clip it is part of. If you Split and Delete ahead of it, it will automatically move and stay locked to the internal timeline of the clip. - there are advantages to doing it both ways

Now I went a little advanced here and chose to use the chroma key to make the green area transparent: